Determinacy of Equilibrium Under Various Phillips Curves

29 Pages Posted: 20 Feb 2008

See all articles by Yoshiyasu Ono

Yoshiyasu Ono

Osaka University - Institute of Social and Economic Research (ISER)

Date Written: February 2008

Abstract

Determinacy of equilibrium under the original, the backward-looking, the forward-looking and the hybrid Phillips curves is examined. If the monetary authority keeps the nominal money stock to be constant, the equilibrium path is always determinate under the original Phillips curve and the forward-looking one. Under the backward-looking one and the hybrid one, however, the path can be non-existent. The case of a Taylor rule is also examined. Under any of the four curves the path is always determinate if the monetary policy is active but is never determinate if it is passive.

Keywords: Phillips curve, indeterminacy, non-existence, Taylor rule

JEL Classification: E52, E31

Suggested Citation

Ono, Yoshiyasu, Determinacy of Equilibrium Under Various Phillips Curves (February 2008). ISER Discussion Paper No. 706. Available at SSRN: https://ssrn.com/abstract=1095666 or http://dx.doi.org/10.2139/ssrn.1095666

Yoshiyasu Ono (Contact Author)

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

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